GLOBAL INSURANCE REGULATORY AND PREMIUM TAX UPDATE

January 2013GLOBAL INSURANCE REGULATORYAND PREMIUM TAX UPDATEThe following is a summary of the latest insurance regulation and premium relatednews that could affect insurance contracts procured by a multinational group.Cyprus: Increase in Stamp DutiesThe stamp duty rates on insurance contracts will increase witheffect from 1 March 2013. The new rates will be as follows:••General liability and other classes: €2 per contact (up from€1.71).••Property and fire: €1 per contract (up from €0.86) forpremiums below €1,709; or €2 per contract (up from €1.71)for premiums above €1,709.Denmark: New Premium TaxThe premium tax payable on insurance premiums is 1.1%on premiums relating to risks located in Denmark. As thepremium tax is a levy on the insured, the tax is an addition tothe premium. This new fixed rate of tax applies to all policiesincepting on or after 1 January 2013.Finland: Increase in Premium Tax RateGermany: Changes in Premium TaxAdministrationThe German parliament approved an amended version of thesuggested Verkehrsteueranderungsgesetz (VerkehrStAendG) on25 October 2012, which affects the Insurance Tax Act (VerStG)as well as the Motor Vehicle Tax Act (Kraftfahrzeugsteuergesetz –KraftStG). The amendments generally deal with administrativeissues, such as insurance tax due dates and payment inforeign currency. In the case of coinsurance arrangements,the participating coinsurers have the option to appoint one ofthe coinsurers to pay the entire tax on the amount of premiumrelating to the risk located in Germany. Reinsurance remainsexplicitly excluded from the payment of premium tax.All insurance contracts, issued by insurers resident andlicensed outside the European Union, which cover riskslocated in Germany, either directly or indirectly, becamesubject to the German premium tax at the applicable tax rateon 1 January 2013.The insurance premium tax rate increased from 23% to 24% on1 January 2013.

Guatemala: Withholding Tax Rate ChangesThe updated tax law (Decreto 10-2012, Article 104, section 1b) increased insurancepremium tax from 3% to 5% on insurance and reinsurance premiums paid to nonresidents.Article 105 requires the person or organisation paying the insurance orreinsurance payment to a non-resident person to retain the 5% withholding tax and todeclare it to the tax authority. These new tax rates were effective from 1 January 2013.Hungary: Premium Tax ChangesOn 1 January 2013, the Hungarian government introduced a 10% premium tax rateinstead of the financial services levy, the vehicle accident tax, and the fire service levy.The premium tax applies on the relevant portion of premiums relating to propertyand casualty classes of risks located in the country. This premium tax is a charge onthe insurers and not the insured, and all insurers, both resident and non-resident, areexpected to pay the new premium tax rate on insurance premiums relating to riskslocated in Hungary.ContactIf you have any questions aboutinsurance regulations andpremium-related tax issues, pleasecontact:Praveen SharmaGlobal LeaderMarsh’s Insurance Regulatoryand Tax Consulting Practicepraveen.sharma@marsh.com+44 20 7357 5333The Netherlands: Increase in Premium Tax RateThe Dutch premium tax has increased from 9.7% to 21%. The new tax rate applies topolicies incepting on or after 1 January 2013. The new rate also applies to any policiesincepting before 1 January 2013 where the due date for the payment of premium is after1 January 2013. The premium due date is the date on which the premium is payable bythe insured to the broker.The information contained herein is based on sources we believe reliableand should be understood to be general risk management and insuranceinformation only. The information is not intended to be taken as advicewith respect to any individual situation and cannot be relied upon assuch. Statements concerning legal, tax or accounting matters should beunderstood to be general observations based solely on our experience asinsurance brokers and risk consultants and should not be relied upon aslegal, tax or accounting advice, which we are not authorised to provide. Inall instances, Marsh recommends that each company seek its own adviceon accounting, regulatory, legal and tax matters from professional legal,accounting and tax advisers.In the United Kingdom, Marsh Ltd. is authorised and regulated by theFinancial Services Authority for insurance mediation activities only.Copyright © 2013 Marsh Ltd. All rights reserved.GRAPHICS NO. 13-0049a